Soybean inched slightly higher to $10.55 per bushel in the early trading session Wednesday on the strength of the US Department of Agriculture’s forecast reflecting low yield potential from North America and Europe in 2018/2019.
The commodity made a 0.5 per cent increase from $10.50 closing price on Tuesday.
The yield reduction, the forecasts say is induced by late plantings in the identified areas.
The USDA cut global soybean ending stocks for 2017/18 by 3.6m tons from its March estimate of 94.4m tons last month to stand at 90.8m tons, in line with reduced stocks in Argentina, Brazil, and the EU.
It reduced its projection for Argentina’s soybean production by 7.0m tons to 40.0million tonnes, through a combination of a smaller crop area and the impact of dry weather, which would be the smallest outturn since the 32million tonnes harvest of 2009.
It also raised Brazil’s harvest estimate by 2m tons to a record 115million tonnes.
Argentina’s shortfall has already begun to force crushers to chase additional supplies for processing, the export report said, noting that 120,000 tonnes of US soybeans, the largest such sale since 1997 have been booked by Argentine buyers delivery in the 2018/19 marketing year starting September.
Wheat prices, on the other hand, fell 0.51 percent to $4.89, three-quarter per bushel Wednesday, shattering a steady increase record since the beginning of April.
The April WASDE raised world 2017/18 wheat ending stocks to 271.2m tonnes, a new record figure and 2.3million tonnes higher than the 268.9millon tonnes March estimate.
While global consumption is rising steadily, it is more than offset by greater production to swell the carryout at the end of June.
While the USDA predicts notes an overall change in the volume of wheat traded on international markets, it highlights the sharp increase in Russian wheat exports. It predicts a rise of 1million tonnes to 38.5million tonnes for 2017/18, a 10million tonnes rise on last year’s export volume.
Besides, the current political and economic sanctions pressure on Russia has weakened the rouble, making Russian grain even more competitive on export markets.